Gordon Brown has won the agreement of senior aides to Barack Obama to try to secure the outline of a world trade deal before President Bush quits the White House on January 20.

Brown is to raise the issue at a meeting of world leaders being convened by Bush on the economic crisis in Washington on November 15.

The business secretary Lord Mandelson said yesterday that a deal would be worth £120bn annually to the world economy.

But he warned in a speech to the Policy Network: "We need to work with Barack Obama to defeat those forces inside America that will try to hold him back. These include isolationists and protectionists and on Capitol Hill these forces are strongly featured in the Democratic party itself - stronger still after some of Tuesday's victories. Obama will never succeed if Congress forces the new president into isolationism and protectionism, which forces America to turn in on itself."

He urged Obama to make an early appointment of a new trade representative.

The British strategy, backed by the Brazilians, is to try to agree the modalities of a deal now and then present this to a new Congress with a Democratic majority. The approach may have advantages for Obama in that he might not have to take the political flak from the new Congress for a deal agreed by his predecessor. The deal nevertheless would need to be sanctioned by Congress, something UK diplomats still regard as a massive stumbling block.

Bush was unable to sanction a deal in July partly due to hostility in Congress, and the need to protect Republican candidates in swing states from angry agriculture and cotton lobbyists worried that their markets would be undercut. India also opposed to a deal.

Mandelson, appearing before a Lords European select committee, said it was possible, but not certain that a deal on the modalities could be secured before Bush steps down. But he added: "It will require real political will, real determination on behalf of the US administration and a willingness to use the remaining political capital of that administration."

Failure to secure a deal would have a devastating impact on some developing economies, he said.

Mandelson also argued that Obama's election would pose difficult challenges for Europe.

He explained: "Europe has to step up to the table. We have shown leadership on climate change: we now have to deliver on our national commitments.

"In peacekeeping and peace enforcement, we have to make the bigger contribution as European nations that I believe Barack Obama will expect. On trade and economics, we have to sustain an open single market at home and openness abroad.

"Half measures or half-hearted ambivalence will not do. Because of the seriousness of the challenges we face, the demands on us are great."